Brought to you by
FreeAgent logo

Award-winning accounting software for small business owners and their accountants and bookkeepers.

Save content
Have you found this content useful? Use the button above to save it to your profile.

Micro-businesses are failing to stay on top of their finances

30th Jun 2015
Brought to you by
FreeAgent logo

Award-winning accounting software for small business owners and their accountants and bookkeepers.

Save content
Have you found this content useful? Use the button above to save it to your profile.

More than half of UK micro-businesses are failing to monitor their financial information effectively, new research from FreeAgent suggests.

A poll conducted by YouGov on behalf of FreeAgent - who provide a multi-award winning cloud accounting system for accountants working with micro-businesses - revealed that only 38% of micro-business owners check the overall financial position of their business at least every week, while 59% admitted to only doing so once a month or less frequently.

The research, which surveyed more than 500 micro-business owners/sole traders and was carried out to mark the launch of FreeAgent’s £1m crowdfunding drive through Seedrs, also discovered that 1 in 10 (10%) respondents said they only personally checked the overall financial position of their business once a year (or less often), while 5% admitted that they never did it.

In addition, 17% of micro-business owners said they did not have immediate access to all of the important financial information they need, such as cash-flow, overheads, tax bills and invoices. And a quarter (25%) of respondents admitted that they did not know what their business’s current profit margin was - while a further 8% did not know what a “profit margin” actually is.

FreeAgent believes that the results show that many micro-business owners aren’t fully aware of what is happening with their day-to-day business accounts or financial information, and this lack of clarity could be putting their businesses in jeopardy.

Ed Molyneux, CEO and co-founder of FreeAgent, said: “It’s really important for small businesses owners to be aware of what’s happening with their day-to-day accounts so they can grow their businesses. We believe accountants have a really important role to play in helping those small business clients stay on top of things.

“With modern cloud-accounting systems like FreeAgent, accountants and their small business clients can see that important financial information at a glance, work together more efficiently to address potential issues and make their clients’ businesses perform even more effectively.”

To find out more about FreeAgent visit their website or call 0800 025 3900. More information about FreeAgent’s crowdfunding campaign can be found here: https://www.seedrs.com/startups/freeagent

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 505 owners/ partners in micro-businesses (i.e. businesses with fewer than 10 employees). Fieldwork was undertaken between 1st - 9th June 2015. The survey was carried out online.

Tags: